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May 2025

Search and seizure — Assessment of third person — Mandatory condition u/s. 158BD — Initiation of proceedings by assessee’s AO without satisfaction note from searched person’s AO — Failure to follow mandatory procedure — High Court held that initiation of proceedings without jurisdiction:

By Keshav Bhujle | Ritu Punjabi, Advocates
Reading Time 3 mins

13. Principal CIT vs. MiliaTracon Pvt. Ltd.:

[2025] 473 ITR 155 (Cal.):

Block period 01/04/1996 to 07/05/2002:

Date of order 3rd July, 2024:

Ss.132 and 158BD of ITA 1961

Search and seizure — Assessment of third person — Mandatory condition u/s. 158BD — Initiation of proceedings by assessee’s AO without satisfaction note from searched person’s AO — Failure to follow mandatory procedure — High Court held that initiation of proceedings without jurisdiction:

A search conducted at the premises of UIC group led to the discovery of certain share certificates issued in the name of the assessee. The Assessing Officer of the assessee initiated proceedings u/s. 158BD of the Income-tax Act, 1961, without recording a satisfaction note as mandated and the assessee denied any undisclosed income. Subsequently, summons were issued to four individuals u/s. 131 but could not be served. The Assessing Officer of the assessee communicated the reasons for initiation of proceedings through a letter. The assessee submitted block returns of income and contested the proceedings, asserting that they were improperly initiated.

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